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Scots home buyers deterred by economy

The Scottish housing market remained subdued during August, as economic uncertainty and lack of mortgage finance deterred potential buyers, according to the latest RICS UK Housing Market survey.

Chartered surveyors in Scotland were asked for the reasons why they felt sales levels continue to be subdued. The most commonly cited reason for this was general economic uncertainty (89%).

In addition, 79% felt a lack of mortgage finance was impacting negatively on transactions. This certainly seems to be borne out in the number of first-time buyers who are still struggling to get a foot on the property ladder.

A quarter (26%) of respondents added that fears over house price falls were affecting transaction levels, as buyers stay away from the market while they wait for things to improve. The report shows that new buyer inquiries, which signal buyer demand, slumped in August.

However, new instructions, which indicate supply levels to the market, rose slightly suggesting those who really want to move are not being deterred by the lack of buyers.

In Scotland, 64% of chartered surveyors said house prices had stayed the same in August, 7% said they had gone up and 28% said they had dropped.

Looking ahead, chartered surveyors expect the number of sales to decline over the coming months, and as a result suggest that house prices will also dip as supply outweighs demand.